SCOTGOLD Resources' share price rose by 9% as Scotland’s only gold mine operator posted record production levels at its Cononish site.
The mine produced 1984 ounces of gold and 10,810 ounces of silver for April and May and said it is set to hit its target for the second quarter of between 2600 and 3200 ounces of gold.
The company said gold grades in flotation concentrate of up to 324.4 grams per tonne were realised during April and May, along with sales of £2.424 million for 226.6 dry metric tonnes of gold concentrate.
The cut and fill stoping, or excavating, mining method is “progressing well” into June, and continues to improve production profile, with the third cut and fill stope targeted for the third quarter of this year.
The company said its £3m Fern Wealth Debt Facility draw down continues with £1.915m received by the company and drawn to date for the processing plant and mine optimisation initiatives.
The announcement was made by Phil Day, the Scotgold Resources chief executive, who has transformed the site’s fortunes in the space of a year.
He said: “We are pleased to report that April and May have delivered record profitable gold production, a trend we expect to continue in June and the rest of 2022, in line with our mine schedule.
“Crucially, as we continue to develop the mine and access areas to stope mine – cut and fill, our mining visibility, mining efficiencies, gold grade definition and control further improve which places us in an ideal position to implement the processing plant and mine optimisation plans to yield further growth.
“With £1.915m now received and drawn from our Fern Wealth Debt Facility, I am looking forward to H2 2022 as we commission the tailings thickener and deliver step changes in performance, gold grade, stability of production and reduced costs per tonne of ore mining.”
The company plans another gold pour in June and says that gold doré continues to be produced.
Day said earlier that the Argyll facility near Tyndrum is set to stand as an exemplar for clean mining.
The firm said it is “committed to responsible mining and is pleased to report it is one of the only global gold producers that does not use cyanide for either its flotation gold concentrate production or gravity gold”.
Scotgold's video is showing gold doré being poured. The company also produces the gold concentrate via flotation which has mainly been referenced in the update.
Funding is boosting optimisation initiatives include the design, construction, and commissioning of a “tailings thickener”, an important part of growing the process, “enhancing mining efficiencies of the underground mine to ensure continuous operations and the installation of an ore sorter at the processing plant between the existing crushing unit and the mill".
This would "realise an increase in ounces of gold processed per tonne at lower tonnages and potentially lower capex and opex”, it said. The tailings thickener has been pre-constructed in Turkey" to allow for the fast and efficient installation at Scotgold’s site".
The thickener is in transit to site where it is planned for installation in August, a delay of up to two months because of current global shipping issues.
Once the thickener is operational the expected gold ounces run rate of the process plant will be at 16,500 – 17,500 ounces of gold on an annualised basis.
In the first quarter, the company focused on the development of the mine, opening the underground mine faces to prepare for stope mining. It said this was to allow the extraction of ore faster, more effectively and "give improved detailed grade control definition to the mine plan, increasing gold recoveries and production".
Its work resulted in achieving access to the stope at Cononish on March 21 which yielded immediate results with gold grades up to 35 grams per tonne for processing being realised.
Shares in Scotgold closed up 2p at 72.5p.
